How to properly measure and improve your outbound prospecting efforts
Hi! This week’s post is the result of seeing similar patterns and problems in outbound prospecting data across a dozen consulting clients over the past few months - from early to late stage, $10k to $100k ACV and whether selling into tech, finance, HR, sales or marketing departments. If you find it useful, please share!
When measuring their prospecting efforts, I’ve found most companies focus on the quantity of activities (calls, emails etc), the quantity of meetings booked and the quantity of opportunities generated. They invariably reach two conclusions:
Conversion rates are lower than desired.
The only way to make up the difference is with more activity.
This naturally leads to a focus on quantity over quality. After all, it’s easier to measure quantity than quality (50, 60, 70 calls a day!) and to implement workflow automation through tools like Outreach and Salesloft.
However, increasing activity seldom delivers the outcomes teams are looking for. Going from a 5 step sequence to a 15 step sequence is not 3x more effective. Neither is increasing the target list from 500 to 5,000.
To start improving your prospecting efforts, you need to begin by answering the following questions:
How many accounts have we identified as prospects?
How many personas have we identified per account?
How many accounts have we prospected?
How many personas have we prospected per account?
How relevant is our messaging?
How many accounts have a problem we can solve?
How many accounts are willing to explore solving their pain?
How many accounts are willing to evaluate our solution?
1. How many accounts have we identified as prospects?
The right answer is as few as possible, because the fewer accounts you focus on, the more rigorous you have to be in how you prospect them, which will make your prospecting motion more effective.
Cap the total number of accounts at 5x the size of your current customer base, or 10x the size of the largest cohesive segment within your customer base. Remember, outbound prospecting works best when directed at customers where you know you have a high likelihood of winning.
You also want to cap the number of accounts assigned to each rep at a maximum of 100, because to rigorously prospect 100 accounts with 3 key personas per account and a 10-step outreach sequence per persona will take a rep 60 business days (i.e. 12 weeks/1 quarter) if they can execute 50 steps (activities) per day.
Total number of accounts assigned—cap at 5-10x.
Number of accounts assigned per rep—cap at 100 per rep for a quarterly prospecting motion, less for monthly.
2. How many personas have we identified per account?
The right answer is never 1. 99% of B2B sales involve at least 2-3 key personas. The typical ones are a champion (Dir/Head), an executive with budget (VP+) and an influencer (sales ops, dev ops, general counsel, IT etc).
When you prospect an account, you want to prospect all key personas at the same time because it stimulates a conversation between them and increases the likelihood of one of them getting back to you.
You therefore want to make sure you’ve identified and researched all key personas before you start your outreach.
Number of contacts (or leads) per assigned account—should be equal to the number of key personas in your ideal customer profile.
3. How many accounts have we prospected?
You want to aim to prospect 100% of the assigned accounts. I usually find that reps have only prospected 30-50% of the accounts assigned to them during the prior 3-6 months. This is a tell-tale sign that the target list is too big.
There will always be a handful of accounts that are bad data. Just make sure you have an account flag in your CRM to enable reps to mark them as such.
Number of accounts with activity this quarter—should be 95-100% by the end of the quarter, with the un-touched accounts flagged in your CRM.
4. How many personas have we prospected per account?
The right answer is all of them. But too many companies prospect a single contact (aka single-threading) on a significant number of accounts. All the data I’ve seen on this (tens of thousands of accounts across dozens of companies) shows that single-threaded prospecting is the biggest driver of low conversion across the entire prospecting motion.
Number of contacts with activity per account—should be very close to the number of contacts per account.
5. How relevant is our messaging?
Getting your messaging relevant is the biggest driver of efficiency in your prospecting motion, as it optimizes for response rate. The more you can improve the likelihood of a response, the more you can reduce the number of touches (activities) in your outreach sequence, which frees up capacity to prospect more companies and personas. Conversely, if your messaging lacks relevance it doesn’t matter how many times you call or email, you’ll just get ignored, or more likely marked as spam, which has severe long-term consequences.
It’s hard to find benchmarks for the optimal number of steps in a sequence but I see diminishing returns after 6-8 touches. Just because you can create 20 steps in Outreach, doesn’t mean you should.
Number of activities per contact—should be 50-100% of the number of steps in your outreach sequence. Look for ways to lower this number while maintaining your response rate.
Number of accounts with a response—important to measure at the account level, because converting the account to a customer is the end goal.
6. How many accounts have a problem we can solve?
Given how rare it can be to get a positive response to a cold outreach, it’s easy to get carried away and immediately push for a meeting, especially if your quota is based on booking meetings. However, you first need to qualify that the person is one of the key personas and that they have the problem you can solve.
The most effective way to do this is by asking a few questions to verify that the prospect is a key persona and has the problem that you solve, and to document their answers in your CRM. If they don’t have the problem, don’t book a meeting. It’s just a waste of everyone’s time. Instead, tell the buyer you can’t help them now and leave the door open to reconnect in the future. Be sure to also flag the account as not qualified.
Number of accounts qualified, with situation and pain points documented.
7. How many accounts are willing to explore solving their pain?
There’s a difference between having a problem and wanting to solve it. If you experience a significant drop off at this point it could be a sign that you are a solution chasing a problem. This is very common in early stage companies and a good signal for tightening your ICP and doing further customer development.
Number of opportunities generated with qualified accounts—should be 95% of the number of accounts qualified.
8. How many accounts are willing to evaluate our solution?
I see a lot of sales teams rush the discovery process in order to mark the opportunity as “accepted” so that the SDR can get credit towards their quota. This is a bad practice because you want to make sure that your AE’s are connecting with all key personas before moving beyond the discovery phase and ensuring there is a commitment to solve the problem. Skipping this is just kicking the conversion can down the road.
However, if you do have the necessary rigor around discovery and are seeing a significant drop off at this point its likely for one of the following reasons:
The account was not adequately qualified (see questions 6 and 7)
Your sales reps are cherry-picking buyers who are already deep in the buying cycle and just happened to come in through outbound.
Your sales reps are not getting buyers to consider the positive consequence of solving the problem (and the negative consequence of the status quo)
Number of opportunities advancing past discovery—should be 65-85% of the number of opportunities created with qualified accounts.
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Also, check out these posts from the archive!